Misuse Fund ~Corruption uninterrupted in Haiti

Corruption uninterrupted in Haiti: by Ezili Dantò

Red Cross Weighs Decision to Build Hotel in Haiti
By THE ASSOCIATED PRESS
Published: March 26, 2012 at 9:09 PM ET

http://nyti.ms/HghcYO

PORT-AU-PRINCE, Haiti (AP) — The International Federation of Red Cross and Red Crescent Societies is considering building a hotel and conference center in Haiti on part of a $10.5 million property that it bought after the 2010 earthquake.

The hope is that profits could sustain the work of Haiti’s local Red Cross in the coming years, the head of the international group’s Haitian delegation said Monday.

The 10-acre compound, known as the “Hilton Property,” was purchased from Comme Il Faut, Haiti’s local cigarette company, in the months after the quake, Eduard Tschan told The Associated Press in a telephone interview.

The charity paid in a single payment, using funds donated by national Red Cross agencies for quake recovery. At the time, Haiti’s recovery was the largest operation in the organization’s history, with 3,000 people working here.

Now that its work is winding down, the international Red Cross is putting together an exit strategy and as part of that process is trying to figure out what to do with this property.

The Haitian Red Cross, which works closely with the Haitian government as almost a branch of its health department, has a rebuilt headquarters on the property and that will remain.

It’s a valuable spot, near the international airport in a growing city. Tschan said two ideas are being studied: selling the acreage not being used by the Haitian Red Cross or finding a business partner and building a hotel and conference center that would provide profits to sustain the Haitian Red Cross.

“There is great potential with this property,” Tschan said.

He said that if a marketing feasibility study determines a hotel or conference center seems viable, the Red Cross will open the project to bidders.

“Ideally it would be a local company,” he said.

CharityWatch president Daniel Borochoff, who evaluates nonprofit organizations, said the hotel plan is risky and highly unusual. More typically, charities invest in low risk securities, he said.

“It’s not clear it would work,” he said. “And if they lose the money it’s going to be a problem.”

Borochoff said a hotel and conference center could tie up funds that might be needed quickly in future disasters, and noted donors hadn’t been informed.

“What would happen if donors learned that instead of giving money to treat cholera or build shelters, it’s going to build a hotel? I understand it’s an investment, but that takes some explaining,” he said.

Raymond Joseph, a former ambassador to the United States, welcomed the project, saying it would expand the number of hotel rooms in Haiti and create employment opportunities in a country where there are few.

“I’m applauding what they’re doing,” Joseph said by telephone. “It will help Haiti by creating jobs for quite a few people.”

Should the hotel happen, it would join other efforts to build hotels and lure visitors to Haiti in the aftermath of the quake, which devastated the capital and other cities in the south.

Best Western International Inc. is building a seven-story hotel with 105 guest rooms, a restaurant and lounge, a full spa and a swimming pool. The inn, aimed at business travelers, bankers and diplomats, is scheduled to open this summer in the heart of Petionville, a hillside city southeast of the capital.

Similarly, Marriott International Inc. is planning to build a $45 million, 173-room hotel in partnership with the Digicel mobile phone company. The hotel is slated to open in 2014 in Haiti’s capital, Port-au-Prince.

There is precedent for the Red Cross building a hotel. The Red Court Hotel, a four-star hotel in Kenya, is owned by the Kenya Red Cross Society and all proceeds go toward the charity.

The international Red Cross has spent $754 million in Haiti since the earthquake, with an additional $114 million spending planned for 2012. Other Red Cross organizations also have their own relief operations in Haiti

MISUSED FUNDS BY NGO

Charity comes under fire again for overspending

By Li Yao (China Daily) Updated: 2011-06-28 07:47

BEIJING - The improper allocation of funds by the Red Cross Society of China and its overspending problems, which were revealed on Monday, have added fuel to the public's anger at the organization.

The Red Cross Society's credibility had already plummeted after a recent scandal involving the misuse of donations, when it was found to have overspent 4.2 million yuan ($647,500), exceeding by 34 percent the accepted budget for equipment procurement in December 2009, according to a report released by the National Audit Office on the implementation of the government's budget.

Other spending irregularities included 300,000 yuan supposedly spent on web management training that has not yet taken place, and 224, 800 yuan of administrative expenses in the construction of a stem cell donor database run by an affiliate organization under the Red Cross.

Yu Jianrong, a professor at the Chinese Academy of Social Sciences, said the disclosed amounts were probably just the tip of the iceberg, and more misuse of funds would probably be discovered.

Many Internet users agreed with Yu's view. In a survey by 21cn.com that began on Monday, 62 percent of the 770 participants as of Monday evening said they no longer believed in any philanthropic organization, another 23 percent said they would donate only via personal contacts, and only five people still considered the Red Cross a trustworthy channel for donations.

Just last week, the Red Cross was embroiled in another scandal that hurt its image and shattered public trust, when a 20-year-old woman, Guo Meimei, claimed to have a link to the organization and boasted online about her lavish lifestyle, although the Red Cross quickly denied having any connection with Guo.

Yu said the incident has triggered a collective outburst of long-time frustration about the Red Cross's murky bureaucracy and questionable governance, and claims that reforms are needed to bring the Red Cross back on track with higher moral standards and more transparency in its allocation of funds.

The Red Cross came under heavy criticism in April when an invoice appeared online showing an office of its Shanghai branch had spent 9,859 yuan on a meal, almost 500 yuan for each attendee.

Hu Xingdou, an economics professor at the Beijing Institute of Technology, said the public's reaction was understandable because the Red Cross has continually demonstrated a lack of financial transparency and weakness in organizational governance.

"The intended effects of donations are compromised when the Red Cross buys things at higher prices, because with backing from the State, it is less sensitive to cost concerns and public accountability," he said.

Hu called for more diversity and innovation in China's philanthropic field, including support for the development of emerging charity organizations in the private sector.

Huang Zhen, a law professor at the Central University of Finance and Economics in Beijing, said the organization's recent credibility crisis was in line with a deep-seated culture of distrust, where people believe all businessmen are dishonest and all politicians are corrupt.

"The organization should be more open about its budgets and allocation of funds to restore public confidence," Huang said.

China Daily